Movie Gallery Discloses Possible Accounting Error

Law360, New York (October 18, 2007, 12:00 AM EDT) -- Movie Gallery Inc. is looking into a possible accounting error connected with the company's acquisition of Hollywood Video, after having been notified by Ernst & Young LLP that Movie Gallery may have inappropriately netted the deferred tax liability connected to the Hollywood Video trade name against the company's deferred tax assets in fiscal 2005.

Ernst & Young, the company's external auditor, notified the newly bankrupt video rental outfit of the potential problem on Oct. 13, 2007, according to a Form 8-K that Movie Gallery filed with...
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